THE Global Justice Movement Website

Friday, October 30, 2009

With the glorious rise in the Dow after horrifying days (not hours) of disastrous plunges, the economy is once again firmly established on the road to recovery. All not only will be well, it already is well. . . . at least when the market closed yesterday to wild jubilation.

Yes, yes, jobs are still disappearing. True, yesterday's drive along an industrial corridor revealed a number of empty factories that six months before had at least had workers' cars in the parking lot and a flag flying. It's just petty to bring up the fact that the increase in GDP is fueled by artificial and unsustainable government stimulus spending and the vast increase in empty and self-negating transactions on Wall Street itself. It is irrelevant to mention that the Stock Market Crash of 1929 was preceded by similar fluctuations and a vast increase in non-productive "investment" that generated no production and only succeeded in raising stock prices to artificially high levels.

To take our minds off of such negative thinking, here are this week's news items:

• While pursuing a reference in Joseph Schumpeter's History of Economic Analysis, we came across Dr. Geoffrey M. Hodgson, an English economist who described himself as a member of the new school of institutional economics. We sent an e-mail, briefly describing the Just Third Way and binary economics, and had a very informative skype conference with him on Tuesday of this week. It turns out he is familiar with ESOPs, but was unaware of Kelso's monetary theories. He was positive about the concepts, and asked to be kept in touch.

• Also on Tuesday we had a very interesting telephone conference with sixteen students of Mission Viejo High School, who are participating in a mock election run by the school's Humanities Department, as we have described in previous postings. They have scheduled a video conference in which it is anticipated that up to ninety students will participate next Friday, November 6, 2009, and Norman Kurland will respond to questions on the issues after a brief presentation on the Just Third Way and the platform of the American Revolutionary Party. Mr. Mark Selle, a superintendent of schools near Spokane, Washington, has expressed interest in duplicating the program in his two school districts.

• On Wednesday, CESJ had its monthly "News and Project Reports" meeting, the usual follow up to the monthly business meeting. A great number of projects and news items were covered, many of which have been reported in the previous weekly news updates.

• Work on Dr. Alamgir's book is progressing. The manuscript is now being indexed. Other projects, such as the "Ferree Compendium" and Dr. Harold Moulton's The Formation of Capital are waiting for the indexing of Dr. Alamgir's book to be completed. The first draft of the "short version" of the money book is finished, except for approximately half a dozen cites and references that need to be tracked down.

• As of this morning, we have had visitors from 41 different countries and 40 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, Aruba, and India. People in Aruba, the Czech Republic, Venezuela, the United Kingdom, and the United States spent the most average time on the blog. Recent postings have generated a surprising amount of interest, arguing that people are starting to look for more creative answers to the economic crisis and the general malaise afflicting the world. The posting on "Personhood and the Ontology of Personalism," while not the most inviting popular title, has had more hits in one day than any posting except the one on Mr. Obama's inauguration. It ranks right behind "The Slavery of Past Savings" for the number two spot, followed by "Justice, Justice, Thou Shalt Pursue," and the recommendation for Dr. Charles Rice's new book, "What Happened to Notre Dame," followed by "What is Natural Law?" The focus on the natural moral law and its application to sound solutions for today's problems seems to be striking an increasingly louder chord with our readers.

Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog - do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.

Thursday, October 29, 2009

In the previous posting in this series we looked briefly at Aristotle's error in concluding that people all have different capacities to acquire and develop virtue. We then examined some of the conclusions that necessarily follow the belief that some people are less human than others, while still others are not human at all.

Being less human (or not human) means that someone does not have the full spectrum of natural rights (or any rights at all) that necessarily accompany the human condition. This is logical, for if you are not a full human being (that is, you do not exist completely as a human), how could you possibly be a full human person? If you are not human, of course you cannot have human rights, and are not, therefore, a person.

This is because only "persons" have rights, and only human beings can be human persons. A "person" is that which has rights, while a "thing" is the object of a right (e.g., a person owns, while a thing is owned). That which has the full spectrum of rights is a full person, while anything with less than the full spectrum is either not a full person, or not a person at all.

This raises the question as to whether it is possible to be a human being, and yet not a human person. This is where a philosophy of natural law comes into play. If, as we concluded in the series on the natural law, the law — and thus rights — is based on Nature (that is, what the human race has decided in all times and places constitutes the "good" as reflected from some absolute source), then the law is "built in" to each and every member of the human race.

Consequently, each and every human being has by his or her own nature, that is, by being itself, possession of the full spectrum of natural rights inherent in the mere fact of existence. That is, if we base the natural law on what we discern of human nature as a reflection of absolute good, the fact that someone is defined as a human being automatically means that someone is also a human person. With respect to humanity, being and personality (personhood) are inseparable. Natural rights are inalienable, including life, liberty, property, and the pursuit of happiness.

If, however, we base the natural law on something other than what we can perceive of the absolute good, as is the case when we base the law on some religious revelation or, worse, reject the idea of natural law altogether and base human positive law on something like the "general will," then the concept of inalienable rights is abolished. Everything, as Heinrich Rommen noted in The Natural Law (51-52) becomes subject to change, clearing the way for pure moral relativism, even nihilism.

By abandoning the idea of natural law based on absolute good and discerned by reason, we open the door to such moral and legal sophistries as partial or non-personhood of that which is clearly human. Why this sort of thing is both appalling logic and bad law will be covered in the next posting in this series.

Wednesday, October 28, 2009

In the previous posting in this series we claimed that personality — personhood — and the natural right of private property (along with the full spectrum of other natural rights) are inextricably linked, and provide essential support for the dignity of the human person. Respect for individual natural rights is, in fact, an integral aspect of human dignity — dignitas. Further, we found that private property is not the only natural right under assault these days. Most people recognize (at least to some extent) when the natural right of free association — liberty — is being attacked, although there is a strong tendency to equivocate and downplay the implications of violations of our natural right to liberty.

Property, however, is just as important as life and liberty. This is because ownership of the means of production vests the owner both with the means to sustain life for him- or herself and his or her dependents. Property also empowers the owner with the means to resist unjust inroads on life and liberty by other individuals, groups, or even (or especially) the State itself. Life, liberty, and property are thus essential to empowering each individual with the ability to acquire and develop virtue, thereby becoming more fully human and fitting each human being for his or her proper end.

This is, in fact, why Pope Pius XI condemned socialism. It is not because socialism seeks to abolish private property per se, but because the justification for abolishing private property results from an orientation and a philosophy that attacks and undermines the dignity of the human person. Socialism is based "on a theory of human society peculiar to itself and irreconcilable with true Christianity. Religious socialism, Christian socialism, are contradictory terms; no one can be at the same time a good Catholic and a true socialist." (Quadragesimo Anno, § 120.)

The abolition of private property is simply the most obvious and sure indication that a proposal is socialist, and constitutes an attack on essential human dignity and the natural law. You could have a socialism that permits private ownership, but does not recognize that ownership as a natural right. In moral philosophy it is the failure to recognize private ownership of the means of production as a natural right that is the basic problem, not the fact of private ownership or lack thereof — an economic problem, albeit an extremely serious one.

The rights to life, liberty, and property however, have been under continual assault since the sixteenth century, when there was a rebirth of an idea rooted in one of the very few mistakes Aristotle made, and which Aquinas went to great lengths to correct. Not coincidentally, this error experienced its renaissance at the same time that the basis of the natural law shifted from Nature (that is, Intellect or reason) to Will — that is, personal faith in something that a believer accepts as a revelation of the truth, and is, as Mortimer Adler pointed out, one of the bases for the establishment and maintenance of a totalitarian State.

Aristotle's error was to conclude that not all human beings have the same ("analogously complete") capacity to acquire and develop virtue. Thus, most people lack the full ability to conform themselves to the dictates of the natural moral law. Instead (according to Aristotle), each individual has a different capacity to acquire and develop different kinds of virtue. Some creatures, "human only in appearance," do not have any capacity to acquire and develop virtue at all. Aristotle called these human-appearing creatures, "natural slaves." Natural slaves require others to take care of them, whether the caretaker is another individual who is a full or partial human, or (as is the case with barbarian nations) the State itself.

The bottom line to Aristotle's thought — and the reason Aquinas worked so hard to correct the problem — is that, carrying this line of reasoning to its logical conclusion, some people end up being considered less human than others, while still others are thought of as not human at all. Full, even "partial" humanity becomes conditioned on something other than mere existence, that is, something other than being. If someone is strong enough to force acceptance of the case that certain individuals or even types or classes of people are not human or are not fully human, you can do anything to them that you want.

Thus, the unborn, the crippled, the mentally deficient, those who believe in the wrong religion or no religion, those with unacceptable political ideas, are social misfits, have the wrong sexual orientation, etc., etc., are thus subject to control or elimination at the will or whim of the majority, or suffer imprisonment or death.

How does this relate to the personhood of every human being? We will start to look at that in the next posting in this series.

Tuesday, October 27, 2009

Even before we posted the final part of our short series on the natural law, we received enquiries asking about going into greater depth in some of the explanations. This is one of the (many) dangers associated with trying to be brief and summarize principles and concepts that the general culture has all but abandoned or rejected. Some good examples of this are, as we have seen in previous postings, the idea of money (and, yes, we plan on completing our "brief" series on "Thoughts on Money" . . . someday) and a sound understanding of the institution of private property.

Primary among the issues raised was that of personality or personhood. There is a great deal of confusion about this relatively simple concept today. Part of the blame can be placed on the totalitarian movements that characterized the twentieth century, based on various forms of positivism that developed out of rejection of the Aristotelian/Thomist understanding of the natural moral law from the twelfth to the sixteenth centuries. We see this reflected in the separation of personhood from being — the idea that a human being is not necessarily at the same time a human person.

The Nazis were adept at sowing this sort of confusion. The National Socialist Party of Germany took to the extreme the socialist tendency to redefine and eliminate natural rights whenever it became convenient or expedient to do so. Primary among the rights such totalitarians ignored or denied were, as we might expect, life and liberty (freedom of association), as well as the capacity of individual human beings to acquire and develop virtue — the "pursuit of happiness." Largely unnoticed among the rights the Nazis redefined away from being natural was the natural right to be an owner — the right to property — and defined the exercise of property (the rights of property) in a way that made how an owner could use what he or she owned completely dependent on the will of the State.

Nor was this restricted to the Nazis. Admittedly, closet socialists, when they are Christian — especially when they are Catholic — tend to deny (especially to themselves) that what they believe is in any way tainted with socialism, particularly since the Catholic Church has condemned socialism in no uncertain terms on many occasions. Such people forget (or ignore) the definition of socialism given by Karl Marx in The Communist Manifesto in 1848: "The theory of the communists can be summed up in the single sentence: abolition of private property."

As any Thomist or Aristotelian can tell you, redefining something changes a thing's "substantial nature," its essence, and makes the thing something other than what it was. Redefinition is thus abolition of the thing, even if you keep the same word or term for that which you have redefined; you have not changed the substantial nature of the thing that went before, but have given something else the same name, abolishing that which held the name previously.

Thus, all the concerned Christians, Jews, Muslims, and other adherents of religions with social teachings based on the natural law who seek to circumvent the demands of the natural right to private property and the derived rights of private property by redefining what it means for something to be private property are (whether they realize it or not) socialists. This is because they thereby abolish private property as what it was, and turn it into what they want it to be. This is moral and legal positivism ("modernism" in "Catholic language") run amok.

To this we contrast the idea of personalism, the philosophy that places persons and personal relationships at the center of theory and practice in science. "Science" includes the social sciences as well as the physical sciences. Personalism regards humanity, both as individuals and as members of groups, and respect for human dignity as the focus of temporal activity, and the perfection of human beings within a just social order in a manner consistent with nature as the "end" of that activity.

Personalism is an approach to Aristotelian/Thomist philosophy that emphasizes the natural rights of each human being, both individual and social, and puts human persons at the center of all human activity. The natural right to private property (correctly defined) is an integral aspect of what it means for someone (or something) to be a "person," and thus have a social identity. We will start to examine how private property and personhood relate to each other in the next posting in this series.

Monday, October 26, 2009

In our penultimate posting in this series, we discovered that materialists who reject faith, and believers who reject reason, are in reality making the same mistake, only from different directions. Both tend to view the world in terms of faith or reason (or, more accurately, demonizes something the other side calls "science" or "religion"), not faith and reason.

Thus, if you believe that the Bible, the Torah, the Qu'uran, or the writings of the gods of secular academia contain specific instructions for the conduct of human life, instead of expressing general principles of truth that apply within a particular sphere, you tend to reject the underlying principle(s) in favor of specific applications that may or may not apply in a particular case. The problem becomes discerning the real basis for the natural law, and going from there, rather than taking your own opinion as to the meaning of some revelation, whether religious or scientific, and trying to force it on everyone else.

This is the whole point of the analysis in Dr. Heinrich Rommen's book, The Natural Law (Amazon, Barnes & Noble) written in the wake of the Nazi tyranny as an effort to explain the origins of totalitarianism. Dr. Rommen, a student of Father Heinrich Pesch, S.J., the great solidarist philosopher, was a member of the Königswinterkreis study group that included, among other notables, Father Oswald von Nel Bruening, S.J., who drafted Quadragesimo Anno ("On the Restructuring of the Social Order"), 1931, under the direction of Pope Pius XI. One of Germany's leading jurists, Dr. Rommen was forced to flee Germany in the 1930s, ending up teaching at Georgetown University, although (oddly) not at the law school. As Rommen explains the position of those who rely on faith rather than reason in matters of science (and, yes, theology and philosophy are sciences),

For Duns Scotus morality depends on the will of God. A thing is good not because it corresponds to the nature of God or, analogically, to the nature of man, but because God so wills. Hence the lex naturalis could be other than it is even materially or as to content, because it has no intrinsic connection with God's essence, which is self-conscious in His intellect. For Scotus, therefore, the laws of the second table of the Decalogue were no longer unalterable. . . . Now . . . an evolution set in which, in the doctrine of William of Occam (d. cir. 1349) on the natural moral law, would lead to pure moral positivism, indeed to nihilism. (Heinrich Rommen, The Natural Law, 51-52)

This, then, appears to be the major philosophical issue of our day: whether the natural moral law (and thus the positive law) is to be based on Nature (Intellect/Reason), that is, what we can discern of divine Nature reflected in human nature . . . or whether the natural moral law is purely a matter of opinion, and whoever is the strongest makes and enforces positive law based on whatever he or she can get away with. As Mortimer Adler observed,

The denial of natural rights, the natural moral law, and natural justice leads not only to the positivist conclusion that man-made law alone determines what is just and unjust. It also leads to a corollary which inexorably attaches itself to that conclusion — that might makes right. This is the very essence of absolute or despotic government. ("The Meaning of Natural Law")

So, to answer the question with which we began this series and reiterate and restate Mortimer Adler's definition, the natural law is the body of principles that guide human conduct. These principles, discernible completely through the use of human reason, are based on understanding of our own nature as we see it manifested in the behavior of our fellow man and our beliefs as to what constitutes the "good" measured against what people have in all times and places agreed is "good."

Friday, October 23, 2009

Consistent with its recent behavior, the stock market is down again. At least as these words are being typed. We just checked the "Yahoo! Finance" page to see how far up the Dow has gone before composing today's news intro, when (surprise, surprise) it has "plunged" again. The stock market never simply goes "up" or "down." It always "plunges" or "soars," even though a "soaring bull market" sounds an awful lot like a cow chip flinging contest. Has anyone ever reflected on the fact that "Dow" constitutes 75% of the word "down"? And what about the usual meaning of "bull"? Would someone unfamiliar with broker lingo really want to buy something in a bull market? Maybe that's where the term comes from. A smart investor is presented with a "sure thing" in a rising market by his or her broker, to which the smart investor (investrix?) responds, "Bull."

Whatever the origin of the terms "bull" and "bear," Wall Street has been in a plunging bear market for the past fifteen minutes. The speculators and gamblers, however, seem able to bear it. At least the streets of the nation's financial district aren't spattered with the remains of brokers practicing self-defenestration from the fortieth floor. In all the excitement and relief over yesterday's end of the recession, however, the economic, financial, and political powers-that-be once again neglected anything having to do with the "real" economy outside of Wall Street and the Washington, DC beltway. Nevertheless, there are some positive signs even among the wreckage of the Keynesian Welfare-State:

• Guy Stevenson, a CESJ member, has ordered a full carton (26 books) of In Defense of Human Dignity (Amazon, Barnes & Noble) that he plans on sending to individuals and groups advocating a personhood amendment to the U.S. Constitution. Guy is taking advantage of the 20% discount available to CESJ members and on quantities of ten or more of any of CESJ's publications. For information on quantity discounts, send an e-mail to onceandfuturebooks@yahoo.com.

• Larry M. Walker, Jr., of Atlanta, Georgia (who commented briefly on this blog this past week) has been tweeting (is that the verb?) a number of our postings on natural law. Mr. Walker describes himself as a "Proponent of natural law, natural rights, U.S. Constitution & binary economics." His twitters (again, not too certain of the nouns and verbs here . . . we're a little too tempted to say "twit") can be accessed here. Okay, you learn something new every day: we just discovered they're called "tweets." So, unless you're Thylvester the Cat, consider tweeting Mr. Walker, who might want to give Dr. Norman Kurland, president of CESJ, a call to discuss his interest in and promotion of understanding of binary economics. (Contact information is on the CESJ website.)

• Over the past week we have increased our efforts to begin networking with supporters of the natural law. CESJ's next book, the short version of a projected much larger work on money, savings, and widespread ownership, shows (or at least tries to show) how the principles of binary economics and a sound money system are a natural "fit" with the natural law, especially the principles of justice as explained in Chapter V of Kelso and Adler's The Capitalist Manifesto.

• The group of students participating in a mock election at Mission Viejo High School apparently ran up against entrenched mental attitudes concerning money, property, and even some vagueness about the definitions of capitalism and socialism from some commentators and critics. A group of about fifteen students had a telephone conference with Dr. Kurland earlier this week to discuss answers to some of the questions raised about the Just Third Way and Capital Homesteading in the campaign so far. Dr. Kurland gave them a brief rundown on how to respond to some of the questions. Ironically, the most severe critic of the Just Third Way proclaimed herself a supporter of Mitt Romney, clearly unaware that, before Mr. Romney dropped out of the race, his advisors had some discussion with Dr. Kurland on the Just Third Way, and the concepts had been very positively received.

• Outreach efforts to three "name" academic economists have been successful in getting a toe in the door for future discussions. Possibly in reaction against the current administration's misuse of Keynesian principles — seriously flawed to begin with — the more thoughtful economists in academia seem to be having second thoughts about the wisdom of severing the social science of economics from the necessary natural law basis of the social order. This may be sparking some serious investigation of the claims of binary economics, especially regarding the Kelso-Adler principles of economic justice, again best articulated in Chapter V of The Capitalist Manifesto (above). (We are withholding the names of the economists for obvious reasons — they've only indicated a willingness to dialogue — a significant step in itself — and naming them would come across as trying to force their hands.)

• Earlier this week, Norman Kurland and Michael D. Greaney participated in an internet discussion on the role of savings in alleviating poverty. The discussion was sponsored by the New America Foundation. Dr. Kurland posed the question, "Why shrink consumption to turn the poor into capital owners? Since by definition poor people, especially in the developing world, are under-consumers who live from hand-to-mouth, would the New America Foundation be open to an innovative new approach to financing future savings and investment in procreative capital assets (not financial capital) that lift the poor out of poverty through incomes from new work opportunities as well as from profit distributions generated by their new productive assets? There are sound macro-economic reasons to turn to future savings, rather then current or past savings, to finance faster rates of new capital formation in any economy. This approach would allocate non-recourse, privately-insured capital credit through the commercial banking system in any nation with a central bank that is empowered to create new, asset-backed money ('pure credit') for investment by low-income citizens in feasible self-liquidating projects, then using the future stream of income ('future savings') to repay the capital acquisition loan." The response from the New America Foundation was too short to address this admittedly large question and time was running out, so Dr. Kurland invited them to dialogue further on the issue.

• As of this morning, we have had visitors from 39 different countries and 39 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Canada, India, and Aruba. People in Aruba, New Zealand, Venezuela, the Czech Republic and the United States spent the most average time on the blog. Recent postings have generated a surprising amount of interest, arguing that people are starting to look for more creative answers to the economic crisis. The postings on "Justice, Justice, Thou Shalt Pursue" and The Slavery of Savings" are tied for first place, both having exactly the same number of visitors. In third place is the recommendation for Dr. Charles Rice's new book, "What Happened to Notre Dame," followed by "No One Can Breathe Against Their Will" and "What is Natural Law?" The focus on the natural moral law and its application to sound solutions for today's problems seems to be striking a chord with our readers.

Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.

Thursday, October 22, 2009

In the previous posting in this immensely popular series (although not as popular as "Justice, Justice, Thou Shalt Pursue" — on which we've even gotten visitors from Tokyo and Belgium, as well as many points in-between) we hinted that there are some problems associated with the approaches that assume that you can only approach the natural law from either faith or reason, instead of faith and reason.

Oddly enough, the only problem (although it is significant) with the "reason alone" people is that they tend to reject anything relating to ethics — moral philosophy — as faith-based, and thus having no place in civil society. This actually goes against their own principles, but it's enough to insert a great deal of confusion into modern society. It's really materialism, not reason. The bottom line is that anything labeled "morality" is, ipso facto, "religion," and must be actively suppressed.

Unfortunately, faith-based people tend to overreact and make two mistakes to the materialists' one. One, when the dictates of reason seem to be in contradiction to their interpretation of revelation, there is a strong tendency to claim that reason must be in error because it contradicts their personal faith. Two (and much more serious), people who base the law on faith have a very, very strong tendency to try and force their specific religious beliefs and practices on others, using the coercive power of the State to enforce their demands.

In reaction, the materialists reinforce their claim that anything based on the natural law — moral philosophy (ethics) — is therefore "religion" and must never be imposed by force. This is a half-truth that starts the cycle all over again. The only results are an intensification of the conflict, increasing levels of frustration, prejudice, and bigotry on both sides, and widespread confusion about the nature of the human person and of society itself that only leads to even more confusion. The materialists and the religion-based individuals and groups both end up supporting their positions on the basis of faith, not of reason.

The basic issue remains unaddressed. If the natural law is found in reason alone, as Aquinas maintained, it applies to everybody. No one is exempted from the obligation to acquire and develop virtue and thereby become more fully human. If, however, the natural law is found only in some revelation — even the revelation of "science" — then only believers in that revelation can become more fully human. By logical development of this belief, it becomes imperative on whoever believes in the divine origin of a specific revelation must force it on others for the others' own good, whether you call it faith or reason.

The implications of this will be covered in the next (and final) posting in this series.

Wednesday, October 21, 2009

As we saw in our last exciting episode in this series, not everyone agrees that human positive law is or even needs to be a reflection of an eternally valid natural law. For thousands of years some people have held that positive law is purely a matter of convention, of agreement among peoples. If you can get enough people to agree with you on what the law — and thus morality — is, then you can do it.

Mortimer J. Adler called this belief "conventionalism" and "positivism." Heinrich Rommen called it simply "positivism," while Pope Pius XI employed the somewhat confusing "theological" term, "modernism." (What the Catholic Church calls "modernism" really doesn't have anything to do with being modern, but is a weird grab-bag of philosophies and theological thought discredited centuries, sometimes millennia ago, and periodically resurrected and given an attractive new name until people catch on. Similarly, "liberalism" in "Catholic language" doesn't mean political or social liberalism, but a specific religious belief that all religions are really the same. "Liberalism" is the theory that a Satanist, a Hindu, and a Southern Baptist all have the same religious beliefs, and any differences are merely semantic.)

To get back to our story, Dr. Adler explains that, while Christians are the largest group of thinkers who base the natural law on what reason discerns and discovers of human nature, this particular orientation is not confined to Christians. We find it (as we might expect) in Aristotle, Cicero, even modern secularists such as Kant and Hegel, as well as in Jews who follow the philosophy of Moses Maimonides and Muslims who follow that of Ibn Khaldûn. The essential point of agreement is that there is somewhere a source of absolute truth. People can disagree, sometimes violently, on what to call this source — most people call it "God" or some variation thereon — but all agree that there is definitely something there, that this source is "good," and that such things as theft, murder, adultery, lying, and so on, are contrary to nature.

Unfortunately, what happens is that some people (especially devout religious believers and, paradoxically, militant secularists and atheists) have the tendency to claim that the natural moral law is not truly an aspect of human nature, but of divine command. The natural law is not discovered by observing what the human race has in all times and places decided is "good," but is, instead, contained in some revelation by some deity.

In the Middle Ages, this resulted in an intellectual "war" between the philosophers who believed that "law is found in reason alone" (Summa, Ia IIae q. 90 a. 1), and those who believed that the law is revealed directly to man by God. That is, there was a conflict between the philosophers who held that the natural law can be figured out by anybody with a brain through the process of reason, and those who believed that the natural law was found in whatever a believer believed to be an expression of the will of a deity, e.g., the Bible, the Torah, the Qu'uran, and so on — that is, in the positive expression of God's Will found in a document believed to be of divine origin.

Obviously, there are some problems inherent in the two approaches, one of which bases things on reason and the other on faith — or there wouldn't be a conflict. What some of these problems are will be covered in the next posting in this series.

Tuesday, October 20, 2009

In 1955, Milovan Djilas published a devastating critique of the allegedly classless society established under communist rule in Eastern Europe. Titled, The New Class: An Analysis of the Communist System, Djilas recounted how, although communism claimed to have made everyone equal, all it had done was replace the bureaucrats of the old system with the even more powerful bureaucrats of the new system — the "New Class."

While The New Class was highly praised in the west, especially in the wake of the "Red Scare" of the 1950s, many people missed a secondary theme in the book — that while the Nomenklatura were definitely worse than what they replaced, the old system was hardly something to write home about. As Pope Pius XI described the situation in §§ 105-106 of his 1931 landmark encyclical, Quadragesimo Anno ("On the Restructuring of the Social Order"),

In the first place, it is obvious that not only is wealth concentrated in our times but an immense power and despotic economic dictatorship is consolidated in the hands of a few, who often are not owners but only the trustees and managing directors of invested funds which they administer according to their own arbitrary will and pleasure.

This dictatorship is being most forcibly exercised by those who, since they hold the money and completely control it, control credit also and rule the lending of money. Hence they regulate the flow, so to speak, of the life-blood whereby the entire economic system lives, and have so firmly in their grasp the soul, as it were, of economic life that no one can breathe against their will.

As we have said a number of times in the materials distributed by the Center for Economic and Social Justice ("CESJ"), virtually the only difference between socialism and capitalism for the propertyless worker or citizen is the name of whoever controls the wage packet. As one ancient Roman writer said, "When changing masters, the only thing that changes for the poor is a name."

What can be done about this situation? Dr. Yasser Nafei, author of Corporate Dictatorship: The Evil Behind the Collapse of the World's Economy (2009), sent us an extract from his book — just released this past August — briefly analyzing the situation and offering an intriguing solution to the problem of what amounts to favored slaves acting as overseers for their faceless corporate masters. Dr. Nafei's analysis is followed by comments from Dr. Norman G. Kurland, president of the Center for Economic and Social Justice.

What about Directors' Ownership?By Yasser Nafei

For many years, I have been puzzled by a very logical question. If board directors are claiming to share the same goals, aspirations, and motivations as shareholders, why aren't they investing in the stock of the companies they govern? Shouldn't a direct investment of their own money be a prerequisite for sitting on a company's board?

Throughout the years, many voices came to support or oppose the concept. On one hand, in June 2002, Time magazine published an article by Daniel Kadlec called "8 Remedies." The article proposed ways to improve corporate governance-mainly in the United States. The author proposed that one effective way to get directors' immediate attention and ongoing commitment is to allow them to buy a large chunk of a company's stock as the price of entry, and be paid only in shares or options with long vesting periods.

On the other hand, many opponents of that proposal argued that having directors-as-shareholders opens the door for fraud, stock inflation, and other illegal practices that roll back the board directors' independence. They cite scandals at Tyco, Enron, WorldCom, and others, where compensated directors aided corruption by turning a blind eye. Many also enjoyed the inflated stocks at the expense of integrity and ethics.

Now let's put on our social justice hats and think about the proposal. Don't you think that when corporate directors invest their own money in the stocks of the companies they manage, that we might witness a complete suite of new behaviors? Can anyone deny that these people would become more active, energized, vocal, and willing to challenge management and reach out to employees to learn more about issues? In short, can the logic deny that direct investments would result in further committed and engaged boards?

So instead of generalizing and prematurely accusing corporate directors of being corrupt, why don't we give the concept a chance? Ron Sargent, Staples Inc. Chairman and CEO, once said, "Money does not trump integrity. Incentives to perform do not translate into incentives to cheat. Values like integrity and courage are alive and well in most directors and executives."

Other sophisticated opponents stress that there is no empirical data to support the link between directors-as-shareholders and companies' improved financial performance. So again we find ourselves back to the old economics model that believed that financial metrics were the only relevant measure of success. However these days, many have already complemented that obsolete financial view with other attributes of success including social responsibility, positive and motivating work environments, long term viability, sustainable and growing customer bases . . . So are we dreaming? Absolutely not.

In March 2005, USA Today ran an article on Staples, the Boston-based company established in 1986. It is considered one of the world's largest office products companies with over 76,000 associates. In 2007 the company reported sales of $19.4 billion and was operating in over 22 countries worldwide. In its policy to align the interests of its board of directors and shareholders, Staples required its directors to accumulate at least $200,000 in company stock over five years.

It's called "having skin in the game." Staples's stock has been consistently improving over the years and despite the fact that we cannot attribute this financial success to the directors-as-shareholders concept, such a move counts as a contributing factor. In the interview, CEO Ron Sargent explained that to have a well-governed company, the focus should be on balancing the loyalty and independence of board directors, including surrendering incentive pay when company results are found to be overstated.

Staples even went a step further to ensure that top management are really vested in the success of the company by mandating that senior executives own at least five times their annual salary in stock. Staples also earned kudos for paying their directors varying amounts dependent on their board ranking as well as meeting attendance. There is no doubt in my minds that Staples's steps exemplify the level of commitment and dedication of its board of directors. It clearly shows a board that is vested in the future of the company and a true focus on helping it to achieve success.

Since we are on this optimistic tone, we can also highlight that in 2004, and prior to its merger with Verizon, MCI announced that members of its board of directors would invest 25 percent of their directors' fees in MCI common stock. This commitment reflected the directors' maturity and willingness to try a new initiative. Some global companies already require their board directors to contribute at least $75,000 as a guarantee that these individuals will feel compelled to contribute their time, intellect, and emotional energy to serve shareholders.

In summary, requiring board directors to purchase shares of their companies' stock is an opportunity to strengthen their commitment, benefit the shareholders, and align the interests of directors with multiple stakeholders. In multiple occasions we have alluded to the fact that many directors are concerned only with pursuing their own interests, such as beefing their resumes, gaining status and recognition, or increasing their pay and benefits. However, the benefit of this proposal is that it helps companies to vet uncommitted directors.

Simply put, directors who do not believe in the future success of their companies will hesitate to put their own money forward, and will withdraw. Contrary to the low-risk directors' stock options programs, which only serve to retain uncommitted directors, the new proposal will help retain only those vested in the long-term viability of their companies. I also further contend that the level of directors' investment should be proportional to the size of the company. A board member joining an international conglomerate might need to invest by multiples of their investment in a startup. While this might be an obstacle to hiring talent that is nonetheless cash-poor, I propose that corporations could advance part of the directors' salaries or bonuses and allow them to use it to buy equivalent stock.

In short, we need not only to continue our appeals for meaningful employees' ownership but also embark on a new frontier and demand directors' ownership.

Norman Kurland's comments:

There is merit in Dr. Nefei's idea that corporate directors in major corporations should have "some skin in the game" — that is, they should have a significant investment in the company for which they make policy. However, in my opinion that will not end "corporate dictatorship" within the existing top-down institutional environment of monopoly or exclusionary capitalism. It will not change the system.

What will change the system of wage slavery, welfare slavery, debt slavery and tax system are new leaders united behind a game-plan to adopt the lifting of artificial barriers to more universal access to capital ownership. Such true "social entrepreneurs" must begin to champion a new macro-economic system beyond conventional Keynesian "mixed economy" principles, a system we call "the Just Third Way." The Just Third Way is a system based on the Kelsonian theory of economic justice, Capital Homesteading legal reforms, and Justice-Based Management principles of leadership and management. The old macro-economic model, in my opinion, should be discarded and replaced by the new Just Third Way model by "architects of the future" such as Dr. Nafei.

Besides other basic writings on CESJ's "virtual library" at www.cesj.org, we should reference yesterday's blog posting on how to build ownership and free economic growth from the slavery of past savings and accumulations concentrated within today's top 1% of humanity, an elite that control most of the world's money and credit systems. The Capital Homestead Act was designed to rectify this barrier to more universal and more efficient access to capital ownership among the multitudes of have-nots of America and the world, without infringing on property rights of existing haves. This link on Capital Homesteading leads to other writings for more detailed explanations of critical reforms needed to build a more just, more free, and participatory market economy. The paper on "A New Look at Prices and Money" gives a more theoretical explanation of the new system needed to change the mindsets of the elite now controlling corporate governance.

How governance power is allocated determines whether corporate dictatorships will be perpetuated or will wither away. Since economic power has and always will follow property, and who has control rights follows who has control over money and finance, then the democratization and justice in corporate governance, and basic issues of accountability and transparency will only change when enough new leaders come together who can influence public opinion and votes to change "the system" that determines future ownership of new capital and future asset transfers. Then the theory and principles of Justice-Based Management will become part of everyone's education and we will overcome the subtitle of Dr. Nafei's book, Corporate Dictatorship: The Evil Behind the Collapse of the World's Economies.

That "evil" is the system of Monopoly Capitalism, controlled by an extremely tiny fraction of humanity who controls money power, and through their money power can control those who govern the corporations, the governments of the world, education, the media, etc. Requiring that those "eligible" to serve as corporate directors to "purchase" shares in the corporations for which they make policy, is like giving aspirin to a dying cancer patient who needs more radical surgery or more advanced cancer treatment. Once we can agree that the diffusion of money power and access to future ownership on asset-backed capital credit will save the market system, then there will be more widespread implementation of Justice-Based Management.

Monday, October 19, 2009

We're starting to hear more about how "Obamanomics" has failed. It's tempting, of course, to blame Mr. Obama for the problem, just as he and others blamed Mr. Bush, but let's face facts. Mr. Obama is no more to blame for the current state of affairs than Mr. Bush was. Each one was and is operating within a seriously flawed paradigm. Because the basic premise is flawed, it's not going to make any difference what is done. Whatever is done will only be the right thing by pure chance, and chances (especially for the majority of people) are getting slimmer by the hour.

Making matters worse is the fact that, even within the seriously flawed Keynesian paradigm Mr. Obama's programs do not make sense. You don't bolster the status quo by pouring money into failed companies or sponsor direct government takeovers of private companies. Instead, the State engages in indirect takeover of private industry by regulating investment returns, the tax rate, inflation, and (above all) artificial job creation that puts money directly into the hands of people who will spend the money not on investment or to bring their asset portfolios back up to previous inflated values, but on consumption, thereby increasing effective demand through full employment.

The flawed basic premise that underlies all of today's monetary and fiscal policy, as well as the bedrock of modern economic thought, is the fixed belief that capital formation can only be financed out of existing accumulations of savings. Held as a virtual religious dogma by academic economists and the politicians and Wall Street speculators and gamblers they advise, what Kelso and Adler called "The Slavery of [Past] Savings" has shackled economic growth, fostered envy and greed, nurtured widespread poverty, and plunged the great mass of people into a condition accurately described as "a yoke little better than that of slavery itself." (Rerum Novarum, § 3)

The following short piece is extracted and condensed from the draft of an upcoming book, tentatively titled "What is Money?" by Norman G. Kurland and Michael D. Greaney. It highlights the seriousness of the problem, and helps us understand Aristotle's observation in De Coelo that a small error in the beginning leads to large errors in the end as it applies to today's confused understanding of the role of existing accumulations of savings in the economy.

Most of modern economics and finance is based on a false assumption: the presumed necessity of existing accumulations of savings to finance capital formation. Prescriptions based on this assumption end up being the wrong thing to do to stimulate a recovery, foster full employment, or achieve sustainable economic development without inflation or deflation.

In their book, The New Capitalists (1961) Louis O. Kelso and Mortimer J. Adler question this basic assumption, thereby earning them the opprobrium of the economics establishment for making (as their subtitle put it), "A Proposal to Free Economic Growth from the Slavery of [Past] Savings." Building on the work of Dr. Harold G. Moulton in his 1935 classic treatise, The Formation of Capital, Kelso and Adler show how capital acquisition for the great mass of currently propertyless people can be financed out of future, rather than past savings by democratizing and monetizing capital credit through commercial bank loans by discounting such loans at a central bank, thereby accelerating private sector growth. Moulton, president of the Brookings Institution, authored The Formation of Capital as part of a series presenting an alternative to the Keynesian New Deal.

The problem as Kelso and Adler saw it was that, given the immense cost of capital in a developing or developed economy, only the people who are already rich, that is, who already own capital, can afford to cut consumption and save. In fact, capital assets are so productive in comparison with mere human labor that the capitalist finds it impossible to consume all the income generated by the capital he or she owns and which accrues to the owner as one of the fundamental rights of private property.

Acting rationally, the capitalist reinvests unconsumed income as a matter of course. This accelerates the generation of increasing amounts of income that cannot be consumed. This in turn causes those who already own far more productive capital than is necessary to provide for all their wants and needs to become increasingly wealthy at an accelerating rate.

In a paradox that has puzzled economists and social scientists for centuries, the very means by which immense quantities of marketable goods and services are provided for the world — the financing of the formation of increasingly efficient and productive capital — is what keeps most people relatively poor and unable to consume everything that is produced. The world is faced with the inexplicable problem that people are in want, even starving and in dire need at a time when there is more than enough unrealized capacity to take care of everyone on earth.

The solution is for those who own little or nothing in the way of capital to become owners of a capital stake sufficient to generate an income that will allow them to meet common domestic needs adequately. Unfortunately, it has become fixed in people's minds that the only legitimate way to become a capital owner is to cut consumption, save, then invest — or to confiscate and redistribute wealth. The former is clearly an impossibility for those whose wages, even opportunities for selling their labor, diminish and in some instances disappear altogether in competition with advancing technology or cheaper labor elsewhere. Some term the latter the equivalent of theft.

Kelso and Adler's answer is to apply basic principles of finance to the science of economics. Thus, if people lack ownership of the means of production other than human labor, and capital is replacing human labor as the predominant factor of production, it seems logical that the solution is to turn people who do not own capital into people who do own capital.

Still, if only existing accumulations of savings can be used to finance capital formation, people who do not own the capital that generates the bulk of income in a developed economy cannot acquire capital. You cannot cut consumption and save unless you own capital, and you cannot own capital unless you cut consumption and save.

As Kelso and Adler discovered, however, a more viable solution is found implicitly in the definition of "money" and in the power of a central bank to monetize and democratize capital credit by discounting non-recourse loans extended by commercial banks for productive projects and collateralized with capital credit insurance, and repay the loans out of future income. Money is anything that can be used in settlement of a debt. "Money" therefore takes the form of a promise to deliver value on demand or at some future date (maturity) to settle the debt. If a promise is "good," that is, we trust the individual or group making the promise to keep his or her (or its) word, then the promise has a current or "present" value.

To acquire ownership of capital, then, a potential owner who lacks an existing accumulation of savings to finance the purchase of capital or to serve as collateral to obtain a loan for the purchase of capital need "merely" make a good promise to pay for the capital in the future. To keep the system in balance, the repayment should preferably come out of the income generated by the capital itself. This promise — asset-backed money — can be made transferable, and used throughout a community as "currency" (current money) until the promise comes due and the holder in due course redeems the promise.

CESJ has developed a proposal, "Capital Homesteading," that is a plan for getting ownership, income, and power to every individual. Adaptable to any economy in the world, Capital Homesteading is an analogue of the 1862 Homestead Act. Capital Homesteading expands the vision of Lincoln to include ownership of land, natural resources, advanced technologies, and infrastructure, including management, marketing and distribution systems, through equity shares in enterprises capable of competing without special protections within a free and just global economy. The idea is that everyone would have a tax-sheltered trust account, similar to an ESOP, financed by non-recourse loans on credit, in which to accumulate income-generating assets. The income from these assets would first be used to repay the acquisition loans with "future savings," then supplement and, eventually, replace income from selling labor, and provide for a secure retirement.

Assuming that only existing accumulations of savings can be used to finance capital formation locks us into a condition of permanent dependency on the rich. The alternative under the past savings assumption is a State that claims the power to manipulate the money supply for its own advantage, or take what belongs to the rich for redistribution among those whom the State finds acceptably poor or deserving. Neither is acceptable from the standpoint of essential human dignity — or basic economic justice.

Friday, October 16, 2009

The good news is that the recovery is once again well under way. The Dow has been up to over ten thousand, and the country is saved. Not only that, Mr. Obama has been awarded the Nobel Prize for peace, so the world is saved. We can now get on to more important things, such as what Michelle will be wearing for their next "date night."

Oh, yes, and where all the new jobs and production that have yet to appear are going to come from and sustain themselves once the stimulus money runs out, how the inequities in wealth distribution and economic opportunity to produce by means of both labor and capital are going to be ameliorated, how all the wars are going to be stopped, debt, wage, and welfare slavery abolished, the currency stabilized, world hunger ended, the national debt eliminated, moral education fostered, adequate and affordable health care achieved, the decay of marriage and family life halted, and the rest of the list of such trivialities taken care of.

Evidently there may still be some things that cannot be cured by simple State fiat, throwing depreciated currency at, or "changes" imposed by coercive measures that benefit the financial and political elite at the expense of the many. It's a pity that no one has ever managed to come up with an overall plan based on sound philosophy, sane economics, and practical politics to address these issues . . . you know, a "Just Third Way" that has the potential to free humanity (and economic growth) from the slavery of existing accumulations of savings in the hands of a private elite or all-powerful State. Somebody should write a book on that subject. We can even suggest a dandy title: The New Capitalists: A Proposal to Free Economic Growth from the Slavery of Savings. It would probably be a bestseller.

Until someone writes the book, however, we'll just have to keep working and muddle on to victory. Some of our current muddling (or, for the more jaundiced, who construe anyone voicing an opinion different from theirs as some kind of heresy — especially when backed by empirical evidence — as "meddling") has involved:

• CESJ's Quarterly Board Meeting takes place tomorrow, Saturday, October 17, 2009, in Arlington, Virginia, at CESJ headquarters. If you would like to attend or participate via teleconferencing but did not receive an invitation and copies of the meeting materials, please notify Dawn K. Brohawn, CESJ's Director of Communications, via contact information on the CESJ website, www.cesj.org. This will not be in time for tomorrow's meeting, but will get you on the list for future meetings.

• Dr. Max Weismann, president of the Center for the Study of the Great Ideas in Chicago, ("CSGI") sent us two more articles by Mortimer Adler for the CESJ research library. The first article was, "The Meaning of Natural Law," which inspired this blog's current "mini series" on the natural law. The second was on a related topic, "Conflict Between Justice and Expediency," a subject increasingly relevant in our day as political and economic leaders become increasingly distanced from sound philosophy and reliance on the natural moral law as the basis of a sane and sound social order. As the motto of the CSGI puts it, "Philosophy is everybody's business." The "Radical Academy" has a large number of Dr. Adler's articles, and can be accessed through the "Resource Links" page of the CSGI.

• Outreach e-mails were sent to former Senator Rick Santorum of Pennsylvania and Representative Chris Lee of New York. The e-mail to Senator Santorum reminded him of his favorable reaction a few years ago to certain elements of the Just Third Way and their application to his current efforts to restore a moral orientation to society. The e-mail to Representative Lee pointed out the potential of the Just Third Way to address his concerns about federal spending and job creation. The e-mail to Mr. Santorum was in response to a solicitation for a monetary contribution to a worthy cause, while that sent to Mr. Lee was in response to Mr. Lee's urgent request for input and feedback. While Mr. Santorum has not yet responded, and Mr. Lee's response was non-committal, both e-mails illustrate the potential for outreach inherent even in such general communications. If enough people respond in a way that directs the attention of public figures to the possibilities contained in the Just Third Way, eventually it will pay off, highlighting the importance of item 17 on the CESJ Code of Ethics: "There are three keys to gaining acceptance of revolutionary ideas: persistence, persistence, and persistence."

• CESJ friend and supporter Michiel Bijkerk, editor of the Arco-Carib E-Zine in the Netherlands Antilles is stretching his physical resources to the limit in Cuba by walking from Havana to Guantanamo Bay to draw attention to the situation and the lack of the Just Third Way everywhere in the world. As he reports, "Who says we have no right to meddle in Cuba's internal affairs. Was not Che Guevara a foreigner in Cuba? Did he not meddle? Moreover we firmly believe that Havana is the cultural and intellectual capital of the Caribbean region. This is our region and there is good reason to believe that one day Havana will be the region's political capital as well. So we have every right to be here and to meddle and anyway, we meddle peacefully using only the WORD. There is no such thing as 'independence' anymore. All nations are interdependent and interconnected. There was once a clear distinction between foreign affairs and home affairs. That is history. The highest political aspiration for the Caribbean region (which includes Central America) is to gain recognition as the third distinct region in the western hemisphere. The connecting link between North and South America as well as between Europe/Africa and the Americas. Why do we do this? Why would anybody in his right mind walk from Havana only to reach Guantanamo? We do it because we want to draw attention to Solidarism, The Just Third Way. We know this will make an honorable and peaceful transition to freedom possible for Cuba. We know that the liberation from this lethal feudalism between socialism and capitalism will do much to promote peace. We know that abundance is the natural order, and that all scarcity-based economics is faulty. Don't contradict us without studying the proposals of binary economics thoroughly first. We share socialism's aim of liberating and empowering the poor. But socialism failed to deliver. The poor remained poor and even had to be oppressed to maintain the socialist system. We share capitalism's superior method of economic production and we combine both aim and method in a spiritual crucible of fraternal reality: The Third Promise of the French Revolution."

• Norman Kurland, president of CESJ, attended a gathering at the New America Foundation in Washington, DC, this past Thursday. The presentation was directed at finding ways to help the poor save, and thus work their way out of poverty. The orientation of the group was locked into what Kelso and Adler called "the slavery of [past] savings, but a few individuals seemed open to the possibilities of future savings — or at least had no effective response or rebuttal of the Just Third Way position — once Dr. Kurland raised the possibility of forgoing the current monopoly on existing accumulations of savings and switching to future savings to finance capital formation and widespread direct ownership of the means of production without relying on charity or redistribution.

• A group of students at Mission Viejo High School in (where else?) Mission Viejo, California, came across the American Revolutionary Party website and decided that the platform made perfect sense — or, at least more sense than anything else floating around . . . face down in a pool on Sunset Boulevard. After giving a close-up look at the Just Third Way (is it really necessary to explain these allusions?) they are running a candidate impersonating Norman G. Kurland as the ARP selection, being interviewed today at a "Meet the Candidates" event at the high school in their version of Comedy Central's Colbert Report (pronounced "Cole-bare" — as in "nude cabbage" — "Re-pour" — as in "Ein mal Bier, bitte"). At least it's not Fetch with Ruff Ruffman. Despite (or, more likely, because of) the less-than-serious gloss put on the campaign, the students are hitting on some extremely thought-provoking issues and presenting the Just Third Way approach in a manner calculated to overcome pervasive attitudes toward the "dismal science" of political economy. The issues, solution, and the creative and thoughtful presentation has, in our opinion, a good chance of informing "Young Persons" ("They are not people, they are Young Persons." — Pooh Bah, Lord High Everything Else of Titipu . . . another allusion, and, I think, a light one) of something other than the regurgitated pabulum offered by politicians and economists floundering about in the current paradigm. If the "Meet the Candidates" event is recorded, we hope they send us a copy. A subtle hint.

• As of this morning, we have had visitors from 38 different countries and 38 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States (with the largest California contingent tuning in from Mission Viejo and environs for some reason, and I didn't know I still had relatives in Torrance), Canada, the UK, Australia and Venezuela (as well as Not Set). People in Aruba, Venezuela, New Zealand, the United States, and the UK spent the most average time on the blog. The most popular posting continues to be the recommendation for Dr. Charles Rice's new book, "What Happened to Notre Dame," followed closely by the posting of the letter (unpublished) sent to the Wall Street Journal, "Justice, Justice, Thou Shalt Pursue," then "News from the Network," "Aristotle on Private Property," and Part IX of the "Thoughts on Money" series, which we may actually finish some day. With respect to the amount of time spent reading, "What is the Natural Law," followed by "On Usury and Other Dishonest Profit" and "Thoughts on Money," followed by how you would spend the stimulus money and "Bring the Jubilee" head the list.

Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.

Thursday, October 15, 2009

Yesterday we noted that Dr. Max Weismann had sent us two articles by Mortimer J. Adler on the natural law and justice. Dr. Adler, of course, was co-author with Louis O. Kelso of The Capitalist Manifesto (1958) and The New Capitalists (1961). With Father William J. Ferree, S.M., Ph.D. (Introduction to Social Justice) Dr. Adler might be considered one of the great philosophers of the Just Third Way. We failed to note, however, that Dr. Weismann had previously sent us a more extended treatment by Dr. Adler of the natural law, although we did mention that fact in a previous news item. If you want more resources than you could possibly imagine about the philosophy of common sense and the natural moral law, visit the "Resource Links" page of the Center for the Study of the Great Ideas.

One thing we've kept insisting on since the beginning of this blog — and quite some time before, as the "Keynote Address" at the centenary of the Central Bureau of the Catholic Central Union of America last year makes clear — is that the restructuring of the social (and economic) order must be in conformity with the natural moral law. Not unnaturally, this raises the question as to what, exactly, is the natural law.

As Dr. Adler explains, "Let us first be clear that by 'natural law' we mean principles of human conduct, not the laws of nature discovered by the physical sciences." That is, the natural law is the way human beings are supposed to act in accordance with their own human nature. It is not the set of mechanical rules that govern how the universe physically operates. "The idea of a natural right order to which all things, including human beings, should conform is one of the most ancient and universal notions." Dr. Adler completes this thought by observing,

In Western society, especially from the Roman jurists and the theologians of the Middle Age[s] on, we find the doctrine of the natural moral law for man. It is the source of moral standards, the basis of moral judgments, and the measure of justice in the man-made laws of the State. If the law of the State runs counter to the precepts of the natural law, it is held to be unjust.

Thus, "the first precept of natural law is to seek the good and avoid evil." As a basic principle, however, this is nice, but nebulous until and unless it can be applied in everyday life. "Such a general principle is useless for organized society unless we can use it to specify various types of rights and wrongs. That is precisely what man-made, or positive, law tries to do." Dr. Adler continues,

Thus, the natural law tells us only that stealing is wrong because it inflicts injury, but the positive law of larceny defines the various kinds and degrees of theft and prescribes the punishments therefor.

For regular readers of this blog, this is one of those "stop me if you've heard this" moments, or (as Yogi Berra would say) déjà vu all over again. Dr. Heinrich Rommen (of more anon) said virtually the same thing in his book on the natural law:

"Thou shalt not steal" presupposes the institution of private property as pertaining to the natural law; but not, for example, the feudal property arrangements of the Middle Ages or the modern capitalist system. Since the natural law lays down general norms only, it is the function of the positive law to undertake the concrete, detailed regulation of real and personal property and to prescribe the formalities for conveyance of ownership. (The Natural Law, 59)

Human positive law is not set in stone, for (as both Aristotle and Aquinas observe), "particular rules of laws should [not] be the same in different times, places, and conditions." The basic precepts of the natural law are discernible by the use of human reason — Dr. Adler doesn't cite Aquinas on this, but in the treatise on law in the Summa, "the Angelic Doctor" states quite clearly that law is found in reason alone. (Ia IIae q. 90 a. 1)

Reflecting on Dr. Adler's explanation, we might conclude that it is humanity's task as a "political animals" to tailor our institutions, among which are positive laws, as well as customs and traditions, to conform as closely as possible to the essential principle of the natural law: good is to be done, evil avoided. Of course, we have to take into consideration the constraints imposed by the existing culture and institutions, human wants and needs, the physical environment, and so on. This is how Father William Ferree defined the "common good," the network of institutions (social structures) within which human beings as political animals carry out their business of living, the chief business being to acquire and develop virtue, thereby becoming more fully human by conforming ourselves ever more closely to our own nature.

Dr. Adler doesn't go this far, but Pope Pius XI developed the idea of an "act of social justice" that is directed specifically at the reform of the institutions of the common good. There's an explanation in Introduction to Social Justice why traditional philosophers like Dr. Adler do not — yet — accept the idea of "social justice" as a "particular virtue," but that doesn't concern us for the purposes of this discussion. The bottom line is that we are not helpless in the face of badly structured institutions or poorly organized societies. It is within our power, as members of organized groups, to effect beneficial social change directly on our institutional environment.

If your eyes glazed over reading the preceding two paragraphs, don't worry. They are not essential to this discussion, although they are critical to the implementation and maintenance of the Just Third Way. Just go on to the next paragraph.

As we might expect, not everyone agrees with this view of the natural law. For thousands of years there has been a school of thought that holds that human positive law is purely a matter of agreement among people joined together in society, a convention not rooted in our very identity as human beings. That being the case, you can pretty much do anything you like as long as you can get enough people to go along with it. Countering this belief, which Dr. Adler refers to as "conventionalism" and "positivism," will be the subject of our next posting in this series.

Wednesday, October 14, 2009

Somewhat to our surprise, our posting Monday of this week on Professor Michael Sandel's course on justice at Harvard ("Justice, Justice, Thou Shalt Pursue") got more hits in a shorter period of time than any previous posting, with the sole exception of the posting the day of Mr. Obama's inauguration — which was also on justice, or (more accurately) the omission of justice from the public arena, especially economics and politics.

This may be telling us something. As we noted in the letter to the Wall Street Journal and as Dr. Norman Kurland, president of CESJ, has been saying for years, there is a great hunger for justice in the world — and that means for a sound understanding of the natural moral law. This is a hunger that is not being met either by State imposition of desired results, or private sector efforts to maintain an unsustainable status quo.

Now, bear with us for a moment. Last week we received a solicitation from the Becket Fund for Religious Liberty signed by Rick Santorum, who served as U.S. Senator from Pennsylvania from 1995 to 2007. Although Senator Santorum assisted CESJ in presenting the "Iraq Oil Proposal" to the Department of Defense, we had to tell him that CESJ does not as a rule make grants or give contributions to other groups or individuals.

We were, however, able to give Mr. Santorum something that might prove more valuable in the long run: a (very brief) updating on CESJ's efforts to foster a revival of the natural moral law in academia and politics, and a recommendation that he reestablish contact with Dr. Norman Kurland, president of CESJ, whom the Senator met with briefly a few years back.

Naturally, we weren't going to waste a great letter like that on one person, so we copied a number of people, including Dr. Max Weismann, president of the Center for the Study of the Great Ideas in Chicago. Even though Dr. Weismann has more pressing irons in the fire that demand his attention, he sent us two articles by Dr. Mortimer J. Adler on justice and the natural law. Dr. Adler, of course, was not only America's premier Aristotelian philosopher of the 20th century and the co-founder with Robert Maynard Hutchins of the Great Books of the Western World program at the University of Chicago, he was also co-founder with Dr. Weismann of the Center for the Study of the Great Ideas, and co-author with Louis O. Kelso of the mis-titled yet profound The Capitalist Manifesto (1958), and the equally mis-titled yet revolutionary short monograph, The New Capitalists (1961).

Why do we call The New Capitalists "revolutionary" when we characterize The Capitalist Manifesto as "merely" profound? Because The New Capitalists calls into question the most fundamental assumption of modern economics, an assumption that keeps the great mass of people tied to the wage system and utterly dependent on the wealthy elite or the State through the monopoly on money creation and access to existing accumulations of savings. Kelso and Adler make this clear in the subtitle of The New Capitalists: "A Proposal to Free Economic Growth from the Slavery of Savings."

Both of Kelso and Adler's books are, as we might expect, solidly grounded in natural law theory. This raises the question as to what, exactly, is this thing we call the "natural law"? After that lengthy buildup, we expect an answer that lives up to its billing. That is what Dr. Weismann provided us with in the two articles he sent us earlier today, and which we will summarize in the next posting in this series.

Tuesday, October 13, 2009

This is an expanded report on the visit to CESJ by Dr. Muhiuddin Khan Alamgir, former Minister of Planning of Bangladesh and current Member of Parliament. Dr. Norman G. Kurland picked Dr. Alamgir up at Dulles International Airport around 9 am on Tuesday, September 29th, and went directly to visit the grave of the late Senator Edward Kennedy at Arlington Cemetery. Senator Kennedy had written letters of support during Dr. Alamgir's false imprisonment. Dr. Alamgir stayed at the home of Dr. and Mrs. Kurland as their guest during his stay.

As a result of his trip, Dr. Alamgir appears to have deepened his understanding of the Just Third Way and Capital Homesteading as a possible national economic agenda for Bangladesh. Dr. Alamgir gave a very good 40-50-minute talk on his upcoming book and the events leading up to his incarceration before the CESJ core group and other guests, followed by over an hour of exchanges on the meaning of economic and social justice, its applications to Bangladesh and the need for authentic leaders to step up to the plate as advocates of Just Third Way development policy.

We also discussed how in his current position as a member of Parliament and as chairman of the Parliamentary Committee dealing with State-owned enterprises, he could test our strategy for transforming and democratizing one or more State-owned enterprises through Justice-Based Management, after identifying management and especially union leaders willing to lead the nation toward our free enterprise version of economic democracy. Dr. Alamgir, like Norman Kurland, has met with Dr. Muhammed Yunus of the Grameen Bank, and finds CESJ's proposed monetary, banking, and credit reforms under Capital Homesteading fully compatible. We provided Dr. Alamgir with one of our rare hard copies of The Capitalist Manifesto (1958) Louis Kelso's first book with Mortimer Adler, three of our books (especially Capital Homesteading for Every Citizen), and several key papers on Kelso's binary economics, the Just Third Way (especially Father William Ferree's Introduction to Social Justice), and Capital Homesteading reforms.

In the group was our personal friend Dr. Sheik Ahmad Subhy Mansour, a Quranic scholar who is in exile with his family from Egypt, after many months of incarceration and torture by the Mubarek regime. His "crime" was causing religious controversy for his advocacy of an interpretation of Islam that stirred up opposition from extremists in the Muslim Brotherhood and forced him to leave Al Azar University after seventeen years of teaching and writing. Dr. Mansour heads the International Quranic Center and has published a number of Dr. Kurland's papers on the center's website.

In common with natural law scholars of all the major faiths, Dr. Mansour believes that compulsion is incompatible with Islam and other organized religions and ethical systems and world peace can only be achieved by organizing to advance the spirit and principles reflected in such documents as the UN's Universal Declaration of Human Rights. Moderate Muslim leaders and intellectuals like Drs. Alamgir and Mansour must organize other Muslims, inspire non-Muslims to support them, and together offer Justice-based strategies to neutralize Muslim hate-mongers who recruit suicide bombers to randomly kill innocent civilians. There's no better place to start than with bottom-up economic system reforms.

Dr. Mansour's exchange with Dr. Alamgir may have been useful in strengthening Dr. Alamgir's sensitivity to the need in politics for more vigorous advocacy of strategies for lifting institutional barriers to more justice in our development strategies, in our credit and central banking systems, in our tax systems, and all other parts of our economic infrastructure based on the democratization of ownership and economic power.

On Wednesday, Dr. Alamgir spent two hours in the morning doing some touch-up editing of the U.S. version of his book and approving of Rowland Brohawn's proposed cover. Dr. Alamgir seemed pleased with Dawn Brohawn's editing and marketing suggestions. (Dawn, Rowland and Michael Greaney are getting the book ready for printing here, and we're counting on Dr. Alamgir's sons to open up doors in academia to review the book for marketing to U.S. readers.) Around noontime, Dr. Alamgir was picked up at CESJ by a Dr. Kazi, a Bangladishi economist who worked at the World Bank and agreed to return Dr. Alamgir to Dulles for his return flight to Boston.

We received word from his son Joy Alamgir that Dr. Alamgir was very pleased with his visit with us. We enjoyed his company and look forward to helping him and other Just Third Way advocates in Bangladesh.

Monday, October 12, 2009

Due to the fact that Friday is this blog's news (or, sometimes, lack-of-news) day, we didn't get around to responding to a good article in Friday's issue of the Wall Street Journal. That, and we've been a little behindhand in zipping off our jabs and jolts to the media. This article, however, was right down our alley, highlighting the virtual complete abandonment of the natural moral law in modern society, even at Harvard (!!), . . . even in a class allegedly on "justice," the premier natural or temporal virtue. With that as a hook, the following letter practically wrote itself. (And if you believe that, send us an e-mail about the bridge in Brooklyn we might be open to selling you.)

Dear Sir(s):

Congratulations on Charlotte Allen's piece on Harvard Professor Michael Sandel's course on justice ("Justice for All: A Class in Ethical Sudoku," The Wall Street Journal, 10/09/09, W13). The fact that approximately a thousand students sign up for Professor Sandel's class argues a great hunger for justice. The problem with the class as described by Ms. Allen, however, is that it doesn't seem to be about justice. "Justice," according to Aristotle and Aquinas, is the habit a person has of rendering to others what is due to them.

Instead, Professor Sandel's students get situations based in utilitarianism that only by a long and extremely tortuous stretch of the imagination come under prudence, not justice. Acts of prudence, of course, assume a solid grounding in justice, the premier natural virtue, something the students don't appear to be getting from Professor Sandel. The largely contrived ethical dilemmas with which the students are confronted fail to take into account the fact that, as far as "value" is concerned, each innocent human life is, in justice, of equal value. Even a single innocent individual may not, in justice, be sacrificed for the good of the many.

Professor Sandel should consider reorienting his class to conform to the ideas in the "Great Books of the Western World" program pioneered by Dr. Mortimer Adler and Dr. Robert Hutchins. A good source for Professor Sandel, his students, and anyone else interested in the natural law basis of western civilization is the Center for the Study of the Great Ideas in Chicago, www.thegreatideas.org, co-founded by Dr. Adler and Max Weismann.

Friday, October 9, 2009

The economy is once again in jobless and productionless recovery mode after the stock market crash of last week. The market is up, the dollar is down, the unemployment rate is up, personal income is down, oil prices are up, ducks and geese are down, and the elevator is up. All of this makes perfect sense to Keynesians, Monetarists, Austrians, and others who hold as a virtual religious dogma the belief that the only source for financial capital formation is existing accumulations of savings.

The only thing we can do is keep reminding people of what Jean-Baptiste Say said to the Reverend Thomas Malthus in 1821 — that you don't make your purchases of what others produce with this thing called "money," but with what you produce. "Money" is just the symbol, the common denominator of value, by means of which I trade what I produce for what you produce. If you can't produce, the economy will not work.

Thus the "mega question" for any economy at any stage of development is how to connect people with the means of production. When labor is the primary means of production, people need to be free to produce by means of their labor. When capital is the primary means of production, people need to be free to produce by means of their capital.

That means people must be free to produce either by what they own in the way of labor, or what they own in the way of capital. The "mega question" devolves into how people can gain democratic access to the means of acquiring and possessing capital as private property, the same way they own their labor. Capital Homesteading answers the mega question.

Until economists and policymakers realize that the answer to the current economic crisis is staring them in the face — and has been for more than half a century — we continue to work to open their eyes. Our efforts this week include:

• We just got an unusual query from a member of the Just Third Way network regarding how we would integrate the natural right to private property in binary economics and its application in Capital Homesteading into the American psyche and the history of the United States. The quick "elevator" response, of course, is that Locke, Sydney and Montesquieu, all "primary sources" of the U.S. Founding Fathers, stressed the importance of universal access to the means of acquiring and possessing private property in the means of production as the basis of a stable social order, and protection of private property as a justification for society. In his Second Treatise of Government Locke went so far as to claim that gaining protection for the natural right to become an owner, and the human rights of property once something is owned, are — politically speaking, and including "life" and "liberty" under "property" — the sole basis of society. The American system of government (at least as it was set up to run) relied on widespread ownership of the means of production in order to prevent economic, and thus political power from being concentrated: "Power naturally and necessarily follows property." (Daniel Webster, Massachusetts Constitutional Convention of 1820) "Power and property can be separated for a time by force or fraud, but divorced never. For as soon as the pang of separation is felt, property will purchase power, or power will take over property." (Benjamin Watkins Leigh, Virginia Constitutional Convention of 1820). Abraham Lincoln's Homestead Act was, for whatever weaknesses it might have had in its conception and execution, a recognition of this basic fact of American life, as de Tocqueville analyzed in Democracy in America (1835,1840). Analogous to the analysis presented by Hilaire Belloc in The Servile State (1912) and An Essay on the Restoration of Property (1936), Capital Homesteading proposes to restore freedom and liberty by restoring private property in the means of production as a basic fact of life for all Americans, eventually all humanity, by extending Lincoln's program from the limited land frontier, to the effectively unlimited capital frontier.

• CESJ received a splendid and generous gift of chocolates and other candies from a friend in Germany, sufficient to enliven our daily lunch meetings and sweeten the discussions for some weeks to come. Viele danke.

• CESJ's Quarterly Board Meeting takes place next Saturday, October 17, 2009. Please notify CESJ via the contact information on the CESJ website asap if you plan on attending, or to be placed on the list to participate in the meeting via telephone.

• Dr. Max Weismann, president of the Center for the Study of the Great Ideas in Chicago, sent us an essay by Mortimer Adler on "The Doctrine of Natural Law in Philosophy," which is a valuable addition to our "Adler Collection." The essay shows that, for all they might differ on the origin and transmission — even content — of the natural law, such diverse thinkers as Aquinas and Locke, even Hobbes, agree that there is a natural moral law that transcends human positive law. Adler's analysis rounds out the perspective of Dr. Heinrich Rommen's analysis found in The Natural Law (1946), and confirms our understanding of the ancient and medieval jurists who spoke of "discovering" the law rather than legislating it. The only problem I have with Adler's essay is that it is illustrated with a photograph of a bust of Adler by Maude Hutchins that stands at the front entrance to the Aspen Institute, which in my opinion does not look a bit like Adler.

• As of this morning, we have had visitors from 38 different countries and 39 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, Canada, the UK , India and Venezuela (and we continue to be popular in Not Set). People in Aruba, Venezuela, the United States, the UK, and Brazil spent the most average time on the blog. The most popular posting continues to be the recommendation for Dr. Charles Rice's new book, "What Happened to Notre Dame," followed by "Ireland: Business Requires Sacrifice," then "news from the Network," "Thomas Hobbes on Property," then Part IX of the "Thoughts on Money." With respect to the amount of time spent reading, "On Usury and Other Dishonest Profit" has bumped the posting on John McCain endorsing worker ownership from the list, followed by how you would spend the stimulus money and "Bring the Jubilee."

Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.